Income & Poverty

About

The economic well-being of most Americans depends on their own income or on the income of family members. If the income of a family or an individual is below the official poverty threshold, then that family or individual is considered to be in poverty.

The poverty threshold follows the Office of Management and Budget’s (OMB) Directive 14, a set of money income thresholds that vary by family size and composition to determine who is in poverty.

Several major household surveys and programs collect income and poverty data, including the American Community Survey (ACS), the Current Population Survey (CPS), the Small Area Income and Poverty Estimates (SAIPE), and the Survey of Income and Program Participation (SIPP).

Subtopics
  • Income: Census money income is defined as income received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. Therefore, money income does not reflect the fact that some families receive part of their income in the form of noncash benefits, such as food stamps, health benefits, subsidized housing, and goods produced and consumed on the farm.
  • Income Inequality: Income inequality is based on the Gini index, or index of income concentration, a statistical measure of income inequality ranging from 0 to 1. A measure of 1 indicates perfect inequality, i.e., one household having all the income and rest having none. A measure of 0 indicates perfect equality, i.e., all households having an equal share of income. Since 1967, U.S. household income inequality has grown 18 percent. Nearly half of that growth occurred during the 1980s. More recently, the growth in income inequality has tapered off.
  • Poverty: Following the Office of Management and Budget's (OMB) Statistical Policy Directive 14, the Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family's total income is less than the family's threshold, then that family and every individual in it is considered in poverty. The official poverty thresholds do not vary geographically, but they are updated for inflation using Consumer Price Index (CPI-U).
  • Small Area Income and Poverty: The Census Bureau, with support from other federal agencies, created the Small Area Income and Poverty Estimates (SAIPE) program to provide more current estimates of selected income and poverty statistics than those from the most recent decennial census. Estimates are produced for school districts, counties, and states. The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions.
  • Supplemental Poverty Measure: For many years, the Census Bureau has estimated a number of experimental poverty measures based on recommendations of the 1995 NAS report (NAS-based measures). An Interagency Technical Working Group on Developing a Supplemental Poverty Measure was formed in 2009 and charged with developing a set of initial starting points to permit the Census Bureau, in cooperation with the Bureau of Labor Statistics, to produce a Supplemental Poverty Measure.
  • Wealth: Household net worth or wealth is an important defining factor of economic well-being in the United States. In times of economic hardship, such as unemployment, illness, or divorce, a person’s or household’s financial assets (e.g., savings accounts) are an additional source of income to help pay expenses and bills. For individuals and households with a householder 65 years and older, wealth is an important source of post-retirement income.
  • Well-Being: Personal or household income is generally regarded as the single best measure of the degree to which people are "well off." However, other factors also contribute to people’s well-being. Extended measures of well-being gauge how people are faring at the household level using such factors as possession of consumer durables, housing and neighborhood conditions, and the meeting of basic needs.

Contact Us

For assistance, please contact the Census Call Center at 1-800-923-8282 (toll free) or visit ask.census.gov for further information.